Developing Marketing Strategies

and Plans
Developing
Marketing Strategies
and Plans
Discussion Questions
1. How does marketing affect customer
value?
2. How is strategic planning carried out
at the corporate and divisional levels?

3. How is strategic planning carried out

at different levels of the organization?

4. What does a marketing plan include?

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 3 of 38
The Value Delivery Approach
 The task of any business is to deliver customer value at a
profit
 By fine-tuning the value delivery process and choosing,
providing, and communicating superior value
 Instead of emphasizing making and selling, companies now
see themselves as part of a value delivery process (From
traditional to Contemporary)

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 4 of 38

The Value Delivery Approach

Provide

Choose Communicate

Value
The Value Delivery Approach
The Value Delivery Process
 Successful marketers must focus on delivering value to
customers. This is accomplished by:
1. Choosing the value – Here marketers do their homework to
segment the market, select the appropriate target, and
develop the offerings value proposition
2. Providing the value – Entails selecting specific product
features, prices, and distribution
3. Communicate the value – The third phase is accomplished
through the use of the sales force, the Internet, advertising, and
other communication methods to announce and promote the
product.

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 6 of 38

 The Value Chain

Primary Inbound Outbound

Activities
Operations Marketing Service
Logistics Logistics

Margin
Procurement
Support Human Resource management
Activities
Technological Development
Infrastructure
The Value Chain
 One way that managers can identify ways to create more
value is through The Value Chain, developed by
Harvard’s Michael Porter
 According to this model, a company is a collection of
activities that are performed to design, produce, market,
deliver and support its products
 The Value Chain identifies nine
 five primary and 4 support activities that create value and cost
in a business
 Primary Activities: (i) Inbound Logistics (ii) Operations (iii) Outbound
Logistics (iv) marketing and sales (v) Services
 Support Activities: (i) Procurement (ii) Technological Development
(iii) HRM (iv) Firm Infrastruscture
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 8 of 38
Core Business Processes Customer relationship
management
Fulfillment
management
Customer
acquisition

New-offering
realization

Market-sensing
Core Business Processes
 A firm’s success depends in part on how well each department performs
its role. However, firms must also coordinate departmental activities to
conduct these core business processes.
1. Market-Sensing – Activities involved in gathering and acting upon
information about the market.
2. New-Offering Realization – Research, development, and launch of
new high-quality product offerings quickly and within budgets.
3. Customer Acquisition – All the activities in defining target markets
and prospecting for new customers.
4. Customer-Relationship Management – Activities involved in in
building deeper understanding, relationships, and offerings to
individual customers.
5. Fulfillment management process – The activities that related to
receiving and approving orders, shipping the goods on time, and
collecting payments.
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 10 of 38
Core Competencies
Firms must focus on what they do
well; things that are the essence of the
business. A core competency must
hold these characteristics.
Difficult to
imitate
Useful in a
wide variety
of markets
Contributes to Southwest Airlines, Walmart,
IKEA and Godrej has unique
perceived Core Competencies which are
customer benefits hard to imitate
Strategic Planning
Management as
investment portfolio

Assessing each
business’s strength

Establish a strategy
Strategic Planning

Strategic planning must focus on three key areas:

1) Managing a company’s businesses as an investment
portfolio
2) Assessing each business’s strength by considering the
market’s growth rate and the company’s position and fit
in that market, and
3) Establishing a strategy

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 13 of 38

Strategic Planning, Implementation,
and Control Processes
Marketing Plan
 A marketing plan is used to direct
and coordinate the marketing
effort and is created at the strategic
and tactical level
 Product Line or Brand Level (Tactical)
 Strategic and Tactical levels
Levels of a Marketing Plan

 Strategic  Tactical
 Analysis of  Product features
marketing  Promotion
opportunities  Merchandising
 Target marketing  Pricing
decisions
 Sales channels
 Value proposition
 Service
(1) Corporate Strategic
Planning

17
(1) Corporate Strategic Planning

1 Define corporate mission

2 Establish SBU’s

3 Assign resources to SBU’s

4 Assess growth opportunities

(1) Defining the Corporate Mission

Who is the
customer? What is of
value to the
What is our customer?
business?

What should
our business What will our
be? business be?
 Mission Statements
Characteristics of good mission statements:

1. Focus on a limited number of goals

2. Stress major policies and values
3. Define major competitive spheres
4. Take a long-term view
5. Short, memorable, meaningful
Vague Mission Statement

To build total brand value by innovating

to deliver customer value and customer
leadership faster, better, and more
completely than our competition
Best Mission Statements

“To organize the world’s information

and make it universally accessible and
useful”. (Google)

“Enriching Women’s loves”.

(Mary Kay)
 GOOGLE’s Philosophy

Never settle for the best.

1. Focus on the user and all else will follow.
2. It’s best to do one thing really, really well.
3. Fast is better than slow.
4. Democracy on the web works.
5. You don’t need to be at your desk to need an answer.
6. You can make money without doing evil.
7. There is always more information out there.
8. The need for information crosses all borders.
9. Great just isn’t good enough.
(2) Establishing Strategic Business Units
Three Characteristics of an SBU:

Unique competitors

A single business or
collection of related
businesses Leader responsible
for planning and
profitability
Defining Strategic Business Units
Customer groups

Customer needs Technology

Defining Strategic Business Units
 Companies often define themselves in terms of the
products it produces
 This view often limits a company
 A market definition on the other hand describe the
business as a customer-satisfying process
 For example, if Xerox defined itself from only a product
perspective (We make copying equipment) it would limit
its ability to market products and services other than
copiers
 SBUs can be defined by:
 1) Customer needs; 2) Customer groups; and 3) Technology
 Strategic Business Units

Company Product Definition Market Definition

Union Pacific We run a railroad. We are a people-and-goods mover.

We make copying We help improve office

Xerox
equipment. productivity.
Hess
We sell gasoline. We supply energy.
Corporation
Paramount
We make movies. We market entertainment.
Pictures
Encyclopaedia
We sell encyclopedias We distribute information.
Britannica
We make air conditioners We provide climate control in the
Carrier
and furnaces. home.
 (3) Assigning Resources to SBU’s
GE/McKinsey Matrix
HIGH
Business Position

Boston Consulting Group Matrix

MED
LOW

LOW MED HIGH

Industry Attractiveness
 GE/McKinsey Matrix
Industry attractiveness Business Position
 Long run growth rate  Total market share
 Industry size  Market share growth compared
 Industry profitability to rivals
 Industry structure Product life  Brand strength (use brand value
cycle changes for this)
 Changes in demand  Profitability of the company
 Trend of prices  Customer loyalty
 Macro environment factors (use  VRIO resources or capabilities
PEST or PESTEL for this) (use VRIO framework to
 Seasonality determine this)
 Availability of labor  Level of product differentiation
 Market segmentation  Production flexibility

29
 Assigning Resources
 Portfolio-planning models such as the GE/McKinsey
Matrix and the BCG Matrix were used in the past to assist
managers in making resource allocation decisions
 But they have been replaced with newer models that
consider shareholder value analysis
 The newer models consider growth from global
expansion, repositioning, retargeting, and strategic
outsourcing.
(4) Assessing Growth Opportunities
New
Businesses

Opportunities

Eliminate
Downsizing
Businesses
The Strategic-Planning Gap
The Strategic-Planning Gap
 The lowest curve projects expected sales over the
next five years from the company’s current business
portfolio
 The top curve is the desired sales over this period
 As the company wishes to grow faster than its current
businesses will allow, the company must seek new
opportunities.
 The firm can take three approaches toward achieving
growth: Intensive; Integrative, or Diversification.
Each of these will be discussed in detail in the
following slides.
(i) Intensive Growth

Product-Market Expansion Grid

New
Market
Diversification
Development
Markets
Current

Market Product
Penetration Development

Current New
Products
(ii) Integrative Growth

Supplier Business Wholesaler

Competitor
(iii) Diversification Growth

Firms can often discover

opportunities outside its
present business. However,
the new industry should be
highly attractive (grow
potential) and the company
should have (or acquire) the
right capabilities to succeed.
Corporate Culture

… is the shared experiences, stories, beliefs, and

norms that characterize an organization.
Marketing Innovation and Scenario Analysis

Companies looking for innovative marketing ideas and

they should look to three underrepresented employee
groups such as: (e.g. in British-based Reckitt Benckiser)
 employees with youthful or diverse perspectives
 employees far away from corporate headquarters
 and employees new to the industry
 Marketing Innovation and Scenario Analysis

 Scenario analysis looks at future

possibilities by asking “What if…”
questions about customers,
competitors, markets
 Developed by The Royal
Dutch/Shell Group
 2. BUSINESS UNIT
STRATEGIC PLANNING
Business Unit Strategic Planning
Business Unit Strategic Planning
 Each business unit must develop a specific mission that
fits within the broader company mission
 For example, the specific mission for YouTube must fit
within the overall mission of Google.
 Micro- and Macro-environment factors  ability to earn
profit
 Three main sources  marketing opportunities: short-
supply offering, new way to supply existing products
(How?), Methods for new products or services (problem
detection, ideal method, consumption chain method)
Opportunity and Threat Matrices
SWOT Analysis

Internal
SW
Strength Weakness

O T
External

Opportunity Threat
 SWOT Analysis
 Strategic planning requires managers to understand the
external and internal environments
 A SWOT analysis allows for these environments to be
monitored.
 Business units must monitor key macro-environment
forces as well as micro-environment factors. Monitoring
the external environment can allow firms to identify
growth opportunities and potential threats to its existing
businesses.
 To take advantage of opportunities the firm must be
aware of its own internal strengths and weaknesses.
Goal Formulation

Ranked

Consistent Quantified

Realistic
 Goal Formulation

After completing a SWOT analysis the firm can proceed to

goal formulation whereby it develops specific goals for the
planning period.
Goals are objectives that are specific with respect to
magnitude and time
Managing these objectives effectively requires these four
criteria to be met.
 Strategy Formulation
Porter’s Generic Strategies

- Product/ services
alliances
- Promotional alliances
- Logistics alliances
- Pricing collaborations
=> Partner relationship
management (PRM)
Strategic Alliances
Program Formulation and Implementation
Feedback and Control

It is more important to “do the right

thing”—to be effective— than “to do
things right”—to be efficient.
Strong leadership
 Product Planning
Marketing Plans
Executive Summary and table of contents

Situation analysis

Marketing strategy

Financial projections

Implementation controls